Small Companies Battle UK Unemployment

In a recent study carried out by the Federation of Small Businesses (FSB), it was revealed that small to mid-sized companies hire around 1.3 million unemployed and disadvantaged people every year. To put that into perspective, that’s approximately 90% of the total job-seeking population in the UK as things currently stand.  Now that’s a huge chunk, and it speaks volumes about just how important small businesses are for the UK job market.

It’s easy enough to see from these figures alone, that small firms pave the way when it comes to turning the employment cog.  You would probably think, then, that the UK Government would offer these aspiring companies a helping hand at every possible opportunity to keep that cog turning, especially during these times of austerity. But according to the FSB, it appears the exact opposite is true. Not only will recently proposed changes to the UK tax system bring with them enough red tape to wrap up the London Eye, they’ll also see the introduction of real-time information reporting, requiring businesses to relay information regarding employee wages to HMRC 12 times per year – a time consuming and administrative headache at best.

Ted Salmon, of FSB, said:

“Small firms play a unique role in providing the way to employment, especially for disadvantaged groups. They have a greater tendency to take on those that would struggle to find a job – those who have not worked for a long time, have little experience or have been sick. They have also shown resilience in the face of recession – still taking on some 1.3 million unemployed people per year. While not all of these will be new jobs, this is nevertheless evidence of the crucial role small firms are playing in our economic recovery.

“We know from our survey work that small firms want to do more to support jobs, but their employment intentions are currently on hold. Many businesses don’t have the confidence to create new jobs at the moment because cash-flow is tight and they need a helping hand. This is why we’re calling for the National Insurance Contributions holiday to be extended. There are also a lot of new regulatory changes in the pipeline. Our concern is that these changes will add to the already heavy administration burden for small firms meaning they choose not to grow or take on staff.”

But despite this, with unemployment levels (though decreasing slowly) still at staggeringly high levels, the onus remains on small to mid-sized businesses to help get our country back into work. With this in mind, many companies have started turning more often to employing interns and / or apprentices to help carry their business forward without putting too much of a strain on finances.

Either way, now more than ever companies will need to be thorough in their approach to hiring new staff.

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